Italy initiated talks with Deutsche Lufthansa AG to sell a minority stake of ITA Airways, the successor of Alitalia SpA, in a move that may kick off aviation industry consolidation in Europe.

Italy’s finance ministry on Friday signed a letter of intent with the German carrier, the government led by Prime Minister Giorgia Meloni said in a statement. The administration won’t provide additional details on the talks, it said.    

Earlier this month Lufthansa submitted a bid, with a view to buying the remaining shares “at a later date.” Further talks will primarily focus on the form of a possible equity investment, and the commercial and operational integration of ITA into Lufthansa, the airline said at that time.

A  deal would allow Lufthansa to expand in one of Europe’s key markets, while charting a course for Rome to rid itself of an asset that has soaked up billions of euros in state support. While ITA and the erstwhile Alitalia have been notoriously unprofitable, Lufthansa would gain access to lucrative trans-Atlantic travel while preventing a rival from building up a base in northern Italy that might soak up passengers from Lufthansa’s own Munich hub.